LightSquared Changes, Congressional Inquiry and More

On February 28, LightSquared announced its Chief Executive Officer Sanjiv Ahuja had resigned his position but would continue with LightSquared as its board chairman. The company will conduct a search to fill the CEO position. In the interim, current Chief Financial Officer Marc Montagner and Chief Network Officer Doug Smith will act as co-chief operating officers. It also was announced that Philip Falcone, chief executive officer of Harbinger Capital Partners, has been added to the LightSquared board of directors.

In a press release, Ahuja is quoted as saying, “During my tenure at LightSquared, we all worked tirelessly to create the nation’s first open wireless broadband network and provide consumers with a new wireless broadband experience. That work continues and I wish the company and its fine management team well as they work to achieve this important goal.”

These announcements come on the heels of the FCC suspending the conditional waiver allowing LightSquared to begin preliminary work to ready the launch of a nationwide wireless hybrid broadband LTE network. Key to a successful rollout for LightSquared was the FCC condition that use of the L-band satellite spectrum would not cause interference.

According to a National Telecommunications Information Administration (NTIA) report submitted to the FCC on February 14 resulting in the suspension, government testing showed interference between LightSquared’s licensed spectrum and precision GPS equipment used by the government and commercial entities for aviation positioning as well as other navigational purposes.

On February 15, things began to snowball. The FCC issued a request for comments on the commission’s ruling barring LightSquared from moving ahead with its broadband network. LightSquared responded with a release highly critical of the FCC and the U.S. government. The release stated unequivocally that LightSquared would continue to pursue a satisfactory solution to the interference issue.

On February 20, various news organizations reported that LightSquared’s satellite partner Inmarsat had issued a default notice to LightSquared due to a missed payment of $56.25 million. Inmarsat indicated in several published reports that LightSquared would have 60 days to correct the non-payment. LightSquared responded with a release indicating that there were several outstanding issues to resolve with Inmarsat and that the payment was not yet due.

Late in the same week, LightSquared dismissed 45% of its staff of 330 amid rumors that the company was closing in on bankruptcy. Philip Falcone, chief executive officer of Harbinger Capital Partners, was reported to say that the lay-off was a cost saving measure.

The U. S. House Energy and Commerce Committee wrote to the FCC, NTIA and the National Executive Committee for Space Based Positioning, Navigation and Timing (PNT ExCom) on February 28 requesting a long list of documents and asking detailed questions concerning communications between GPS manufacturers, the FCC and other government entities prior to the negative ruling on the LightSquared waiver.

On March 2, a news report indicated that “leaked” e-mail messages show that Defense Department personnel may have gotten too involved in the LightSquared testing phase, favoring the GPS industry objection to the LightSquared network plans.